Unveiling Erebor: Peter Thiel's Crypto Bank, the Conspiracy of Trump's Benefactors

Author: Azuma, Odaily Planet Daily

On July 3, multiple mainstream financial media reported that a group of tech billionaires, including PayPal co-founder and Silicon Valley venture capital giant Peter Thiel, are jointly launching a new bank named Erebor, aimed at filling the gap in banking services for the cryptocurrency industry following the collapse of Silicon Valley Bank.

The Financial Times reported that, aside from Peter Thiel, the billionaires initiating Erebor also include Palmer Luckey, co-founder of defense technology company Anduril, and Joe Lonsdale, founder of big data analytics company Palantir (of which Peter Thiel is also a co-founder). Additionally, Peter Thiel's venture capital fund, Founders Fund, will directly invest in Erebor.

If the introductions of Palmer Luckey and Joe Lonsdale sound unfamiliar to many readers, it can be noted that both, along with Peter Thiel, are significant financial backers of Donald Trump in the 2024 U.S. presidential election.

It is worth mentioning that the name Erebor is derived from the fantasy epic "The Hobbit," where it is a "lonely mountain" occupied by the dragon Smaug, beneath which lies an endless treasure of the dwarves. Furthermore, the names Anduril and Palantir are also taken from the series; the former means the famous sword "Flame of the West," while the latter refers to a "crystal ball" that can traverse time and space, gaining insight into all things.

Erebor has applied for a national bank charter from the Office of the Comptroller of the Currency, which will allow Erebor to conduct banking operations. According to the application documents made public this week, Erebor will "act as a national bank… providing traditional banking products and services related to virtual currencies", targeting innovative economy enterprises in the U.S., particularly tech companies focused on cryptocurrency, artificial intelligence, defense, and manufacturing, while also serving their employees and investors, and planning to provide services to foreign companies seeking access to the U.S. banking system.

The Financial Times particularly emphasized that Erebor hopes to take on the original market positioning of Silicon Valley Bank, providing banking services to high-risk enterprises and cryptocurrency practitioners who may be rejected by traditional banks.

In 2023, Silicon Valley Bank, which had a glorious 40-year history and had won Forbes' "Best Banks in America" award for five consecutive years, declared bankruptcy due to a liquidity crisis. Many cryptocurrency-related projects/institutions, including BlockFi, Circle, and Avalanche, were clients of Silicon Valley Bank at that time, leading to a severe blow to the cryptocurrency industry, causing BTC to briefly fall below $20,000 in panic.

Insiders revealed that the co-founders of Erebor began discussing the establishment of the bank after the collapse of Silicon Valley Bank in 2023. Although Silicon Valley's assets were acquired and restarted by First Citizens Bank, and some professionals from the bank moved to HSBC USA, investors and executives of startup tech companies still generally complain about barriers to accessing banking services—many enterprises find it difficult to obtain financing support at previous levels.

Erebor stated in its application documents that stablecoin-related business will also be a top priority for the bank—"stablecoins" pegged to real assets like the U.S. dollar are expected to become a key focus of the business, with the document emphasizing its goal to become "the institution with the most comprehensive regulation for stablecoin trading."

Insiders indicated that Palmer Luckey and Joe Lonsdale will not participate in the daily management of Erebor. The bank's co-CEOs will be Jacob Hirshman, who previously served as an advisor to Circle, and Owen Rapaport, co-founder and CEO of digital asset software company Aer Compliance. A former senior executive vice president of Valley National Bank will serve as president.

Erebor's banking headquarters will be located in Columbus, Ohio, with an office in New York that will only provide digital services, with all products marketed through a mobile app and website. Details regarding shareholder composition, equity structure, and business plans remain confidential.

With the smooth passage of the GENIUS Act through the Senate and the new SEC chair's commitment to establishing a reasonable regulatory framework for the cryptocurrency market, investment and business activities related to cryptocurrencies are bound to grow continuously, while there remains a certain gap in related banking services. Including Erebor, several players have already noticed this opportunity.

In the foreseeable future, more intense competition is expected to emerge around this service, but for the cryptocurrency industry itself, which is troubled by conservative banking services, this competition may be more beneficial the more intense it becomes.